ch42
. Management of an LLC is vested in its: a. members b. partners c. shareholders d. managers
a
The owners of a limited liability company are known as: ______. a. members. b. partners. c. contributors. d. electors.
a
The partners who manage the limited partnership and are personally liable for the firm debts are called the __________ partners. a. general b. active c. licensed d. unreserved
a
A limited liability company may be classified as a partnership for tax purposes if: a. such an election is made by "checking the box" for partnership tax treatment on the appropriate Internal Revenue Service form. b. such an election is made in the operating agreement. c. such an election is made in the articles of incorporation. d. a majority of its members petition the Internal Revenue Service for partnership tax treatment.
a
A limited liability company: ______. a. is the same type of business entity as a "Subchapter S" corporation. b. has no restriction on the number of owners. c. is taxed in a manner similar to that of a corporation. d. has unlimited life regardless of what happens with any individual member.
b
All of the following statements concerning LLC's are incorrect except: ______. a. Federal income tax is due on its income as an entity. b. Income flows through to the members based on their proportionate interests in the company. c. No filing is necessary to form a limited liability company. d. All members enjoy unlimited liability.
b
Which form of business entity was created primarily to professionals from malpractice liability generated by other owners in the firm? a. the limited partnership b. the limited liability partnership c. the limited liability company d. the general partnership
b
The spread of LLC's resulted from: a. a United States Supreme Court decision. b. an Internal Revenue Service ruling. c. a Wyoming Supreme Court decision. d. a Securities and Exchange Commission ruling.
b
. In every state, LLP partners remain ______ liable for their own negligence with ______ liability for the wrongful acts of those whom they directly supervise and control. a. personally, partial b. fully, partial c. fully, unlimited d. contributorily, unlimited
c
All of the following statements regarding LP's are not true, except: _______. a. The words limited partnership or simply LP must appear in the firm's name. b. General partners cannot avoid personal liability by incorporating. c. Limited partners can lose their liability limitation if they participate in the control of the business. d. If sued, limited partners can lose more than their capital investment.
c
The dissolution and winding up of a limited partnership is governed by the same principles applicable to a: __________. a. "subchapter S" corporation. b. limited liability company. c. general partnership. d. limited liability partnership.
c
Each limited partner in a limited partnership has all of the following rights and benefits, except: a. A share of the profits. b. The right to sue the general partner to protect the limited partners' interest. c. The right to manage the limited partnership. d. The right to vote on dissolution of the limited partnership.
c
A court can disregard the LLC entity to hold one or more members personally liable in any of the following situations, except: _______. a. when members fail to follow formalities. b. when members commingle company and personal funds. c. when members ignore the articles of organization. d. when members vote to make substantive changes to the operating agreement.
d
A creditor's right against a member's interest in an LLC is limited to a(n) _______ order, and the creditor with such an order has only the rights of an assignee of an interest in an LLC. a. dissolution b. compliance c. assignment d. charging
d
A limited partnership can be formed by one (1) or more __________ partners and one (1) or more __________ partners. a. unreserved; reserved b. active; silent c. licensed; unlicensed d. general; limited
d
Under the RULPA, a limited partner may contribute: ______. a. cash only. b. property only. c. services only. d. cash, property, and services.
d
Under the RULPA, a limited partner probably will not lose his limited liability in any of the following circumstances unless: ______. a. the limited partner becomes a contractor for, or an agent or employee of, the limited partnership or of a general partner. b. the limited partner consults with and advises a general partner regarding the partnership business. c. the limited partner votes on partnership matters, such as dissolving and winding up the limited partnership or removing a general partner. d. the partners fail to file a limited partnership certificate.
d
When no LP certificate is filed, what is the result? a. Only limited partners are fully liable. b. Only general partners are fully liable. c. Limited partners retain their limited liability. d. Both general and limited partners are fully liable.
d
Like a general partnership, LLC's are dissolved by all of the following situations except: _______. a. by the consent of the members. b. upon the death of a member. c. upon the expulsion of a member. d. when a derivative suit is filed.
d
Members of a limited liability company share profits: a. according to their status (general or limited) in the firm. b. in proportion to their contribution of services. c. in proportion to their capital contribution. d. according to the terms of the operating agreement.
d
